Page 101 - DMGT501_OPERATIONS_MANAGEMENT

Unit 4: Process Selection and Facility Layout

intervention. FMS brings flexibility to manufacturing so that a part can be produced when Notes
the market requires it. The system is flexible enough to suit changing market conditions
and product type without buying other equipment.
Computer-aided manufacture and control enables to set up time on machines or minimize
changeover procedures. Computers control machines so that they can respond to pre-programmed
instructions. Parts or components are designed using Computer Aided Design software (CAD)
and the data from design specification provides the input to generate instructions to computer-
controlled machines. Due to this, the production of frequent, small batches is possible and
machine availability can be better scheduled in response to customer orders and unit production
costs can be kept low.
A production line assembling cars, e.g., Maruti, can switch from producing large batches of one
model of car to another model with a different shape and arrangement of sub-assemblies within
minutes and multi-skilled workers can re-configure their work stations with required materials.

Processes and Customer Involvement

Many processes are designed keeping in mind that value is provided by involving the customer
in the delivery of the final product. The involvement may range from self-service to the customer
by deciding the time and place where the service is to be provided.
1. Self Service: Morning store in Delhi started a new trend in buying groceries by introducing
self-service. This was a change from the traditional system where the customer gave a list
to the grocer who then supplied the items. Morning store found that they not only saved
money by not employing people, but also they increased sales due to a high level of
impulse buying. Though traditionally self-service was meant to save money and thereby
provide greater value to the customer, it soon found application for other strategic
considerations also.

In USA and Europe, manufacturers of goods such as toys, bicycles, furniture, etc., offer
products where the customer performs the final assembly. The rationale behind such
decisions is that the manufacturer saves on production, shipping and inventory costs, and
these costs are passed on to the customer. This concept is slowly finding applications in
developing countries also.
2. Product Selection: Business organizations are increasingly attempting to involve their
customers in the product design by providing them different options for customization.

Example: Maruti Udyog Limited, the premier automobile manufacturer in India, in a
bid to retain its premier position in the market, is offering customization for its basic car model,
the Maruti 800, even before consumers have demanded it. The customer has been offered a
choice of color combinations, material and functionality add-ons. The facility is not only available
on new purchases but also available for in-use cars so that the company retains the goodwill of
its existing customers.
This type of option has implications both in product as well as process design decisions.
3. Partnerships: Organizations engage in an active dialogue with customers using new
emerging technologies. Customers are increasingly becoming partners in creating value.
Customers can now decide the time and location where the service or product is to be
delivered. Pricing and billing systems are modified to customer convenience.

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